Do You Buy Based On Value Or Price?

"Price is only in question when Value is unclear."

Steve, you are coming across people who are not able to tell the difference from your/Farmer's insurance and every other one. This is caused by the huge number of TV insurance ads claiming to save money. People are being programmed to buy on price. "Use the internet!" Therefore, agents are less understood than ever.

Blame the industry.

People especially question price when it is an assumed commodity- as portrayed by the industry. Another reason they ask? No one has ever explained or demonstrated the value of their particular insurance or brand or agent using simple educational tools.

Think of it this way: If you were legally required to carry 5 gallons of water in your car (in case your radiator needed changing), and it had to be poured out and replaced every 6 months, wouldn't you naturally look for the cheapest water? That is what auto insurance is to most drivers- the water bottles. Rarely used by everyone who has to carry insurance and every six months to a year it 'goes bad' and has to be renewed or replaced.

To answer your question, everyone buys on value. And when dealing with a commodity, the only value indicator is price. So lowest price is automatically assumed to be best value. If you had a gas station nearby put their gas at $1 a gallon, you would go there because it's the best value, right?

Breaking this cycle requires a number of steps, including differentiation, niche'ing, education, relationships, customer service and doing what your competitors can't or won't.

Do you have "Don't get burned by your insurance when there's a fire" handout? That a differentiating educational piece. What does your business do that no one else does? From my experience, I have many letters from agents I use as examples of why the letter produced nothing. I could almost guarantee I know what potential clients get from Farmers- and it's horrid!

Having worked with agents in the past, there are solutions using Direct Response Marketing that have plenty of proven results.

You can compete, but need to look around and see what every other insurance agent is doing- and do the opposite! Or at least something different...

Hope that helps! Mark

Steven,

People who buy insurance on price alone usually buy the wrong coverage. Price is one part of a comprehensive list of benefits. I am in life and health Insurance, i can tell you stories of people who decide to buy on price alone then a week later they call back with their sad stories. Some people you may have to fix the problem after they make a poor choice. Honesty wins in the long run. Regards -Lloyd G.Robinson

Depends what I am buying? If it's an airline ticket or electricity, Price. If it's a cake or restaurant meal, taste. Yum costs money :-)

I buy "stuff" based on value (what will it cost to own/operate over time considering the quality and longevity of the product. I buy insurance based on price because ALL insurance is just a series of term contracts. Pay for a months, at the end of the month it is gone, expired, no longer there. Plus insurance is a gamble that something bad is going to happen, it is the product you buy hoping you never need it. It feels bad to pay for it, it feels equally bad to need it. I take no comfort or solace in knowing it is there so the only factor that matters is cost.

I buy based on need and budget restraints. If I can use innovation and collaboration to me my needs I do so.